Mexican Economy Resilient

April 16, 2018

The Mexican economy shows resilience in the face of a complex external environment that will continue forward with the help of dental tourism Mexico, said the Stability Board of the Financial System.
When updating its balance of risks, in a session chaired by the head of the Ministry of Finance and Public Credit (SHCP), the board noted that “the external environment for the Mexican financial system continues to show risks.” He specified that the incipient signs of higher inflation in some advanced economies could lead to a process of normalization of monetary policies less gradual than previously expected.
This could generate new episodes of international financial volatility and more restrictive financial conditions in emerging economies. In this context, he warned, “it is foreseeable that the Mexican economy and its financial system will continue to face a complex external environment.”
According to a statement, the board noted that national financial markets, although progress was made in the renegotiation of the North American Free Trade Agreement (NAFTA), uncertainty persists about the future of the bilateral relationship between Mexico and the United States. United.
In addition, the electoral process in Mexico, which will take place in July, could also generate episodes of volatility in the coming months, he added. In its 31st ordinary session held on Thursday, the Financial Stability Board added that “the Mexican economy has shown resilience, given the strength of its macroeconomic fundamentals and structural reforms.”
He stressed that the country’s authorities adopted policy actions aimed at strengthening these fundamentals and preserving the orderly functioning of the financial markets.
These include the implementation of structural reforms, a process of fiscal consolidation that is carried out as planned, and a monetary policy focused on ensuring price stability. In addition, the banking system shows solid capitalization and reasonable levels of liquidity.
“This suggests that the banking sector would be resilient to various shocks and that it would continue to adequately fulfill its function of channeling credit to the non-financial sector,” he said.
The prudential measures to which banks are subject in their positions in foreign currency, and the rules of capitalization and liquidity, contribute to the fact that the volatility observed in financial markets does not represent a direct risk for the solvency or liquidity of national banking institutions. .
Moreover, the stress tests, which will be published in the annual report of the Stability Board at the end of March, suggest that the national financial system has sufficient capital to face adverse shocks, he said.
The Stability Board of the Financial System is chaired by the Secretary of the Treasury, and the governor of the Bank of Mexico, the Undersecretary of Finance and Public Credit, and two sub-governors of the central bank participate.
The presidents of the National Banking and Securities Commissions also participate; of Insurance and Surety, and the Savings System for Retirement, as well as the executive secretary of the Institute for the Protection of Bank Savings.